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Life Sciences &

Health in Thailand
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Thailand is the second largest economy of Southeast Asia and one of the world’s leading medical hubs. Its well-equipped hospitals
offer a wide variety of services and attract yearly over 2.5 million foreigners for medical treatment. The Thai health & life sciences
industry also offers interesting business opportunities for Dutch companies, including on hospital design, medical devices and
pharmaceuticals.

With a Gross Domestic Product (GDP) of USD 405 billion (2014), countries. Most of the spending concerns the public sector, accou-
Thailand is the second largest economy of the region. It is an upper ning for more than 80 percent of total spending in 2014.
middle income country with an open, export-orientated economy
with exports accounting for around half of its GDP. Strategically The main driver of demand for medical services and medicines is
located to serve markets in Southeast Asia, India and China, the the country’s universal healthcare system which substantially
Kingdom is one of the key transport and logistics hub. Thailand is reduced Thailand’s uninsured population in both urban and rural
WTO member and its membership of the Association of Southeast areas. The system is divided into three programs. The Civil Servant
Asian Nations (ASEAN) provides the advantages of the ASEAN Medical Benefit Scheme (CSMBS) covers 7 million government
Economic Community, a single market of over 600 million people workers, the Social Security Scheme (SSS) - based on an employer
covering 10 countries in the region. In addition, the country has free contribution system - covers about 10 million private sector wor-
trade agreements with China, Japan, South Korea, India, Australia kers and the comprehensive Universal Coverage Scheme (UCS). The
and New Zealand and is negotiating on more agreements, inclu- UCS is the scheme that provides free basic healthcare to all remai-
ding with the EU. ning 50 million Thai citizens.

In May 2014, the Thai army seized power ending months of political A second catalyst is Thailand’s aging population of 67 million peop-
unrest. While stability has been restored, political divisions remain le. The percentage of the population aged over 60 currently stands
unresolved and democratic elections are not expected before at around 15 percent and this figure is expected to increase to 25
mid-2017. percent of the population by 2030.

Despite the economic and political turmoil, the country provides A third driver for the significant growth of Thailand’s healthcare
interesting business opportunities for Dutch companies, including market is medical tourism. The country is recognised as one of the
in the Thai life sciences & health sector. In 2014, total healthcare foremost destinations in the world for low cost, and increasingly,
expenditure was estimated at USD 17.9 billion, equalling a per capi- high quality treatment with a growing number of hospitals gaining
ta expenditure of USD 266, which is higher than most other ASEAN international accreditation. Of the 26.5 million people who visited

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Thailand are those related to surgical procedure equipment, respi-
ratory devices and oxygen therapy, orthopedic implant devices,
heart valves, neurosurgical devices, rehabilitation equipment &
accessories and dermatological devices. In addition, there is a gro-
wing interest in digital healthcare.

Producing medical devices in Thailand


There are approximately 160 local manufacturers of medical devi-
ces in Thailand. These mostly concern small companies producing
Thailand in 2013, about 2.5 million came for medical reasons, with lower-end medical devices, such as disposable test kits and syrin-
more than half coming from the Middle East. Medical tourism in ges, as well as latex products, including surgical gloves and cathe-
Thailand accounts for roughly 10 percent of its economy. In 2013, ters. Over 80 percent of domestic production is exported, a trend
Thailand earned USD 4.3 billion in revenue from medical tourism, which is not expected to change in the near future.
after average growth of 15 percent a year over the past decade.
The Thai Board of Investment (BOI) tries to attract investors by
providing incentives, such as tax exemptions for machines and cor-
Hospitals porate tax exemption for eight years. Although FDA approval is still
needed, it is relatively easy to start up a manufacturing business,
There are over 1,000 public hospitals and 400 private hospitals in compared to neighboring countries.
Thailand offering medical services. Despite regional disparities, the
general level of healthcare is considered high with well-equipped However, domestic production cannot provide in the growing
hospitals and well-trained staff. Besides public and private hospi- demand for more sophisticated equipment. Therefore, import cur-
tals, there are over 18.000 medical clinics, offering specialized ser- rently accounts for over 85 percent of the market and is expected to
vices, including dental care and acupuncture. further increase in the coming years.

Most business opportunities can be found in the rapidly expanding


private hospital sector. Hospitals in Bangkok serve more than 43 Importing medical devices in Thailand
percent of medical tourists coming to Asia. Due to the large pro-
portion of international patients, there is an increasing demand for As local manufacturers cannot produce more sophisticated equip-
general examinations, cancer treatments, hip replacements, kid- ment, medical device import accounts for over 85 percent of the
ney transplants, cardiology testing, dentistry, heart surgeries, cos- total market demand. Importing medical devices, pharmaceuticals,
metic surgeries and sex change operations. Recently, there have food, food supplements, products for animal health, or other
been mergers and acquisitions of private hospitals, aiming for medical, narcotic and toxic substances into Thailand requires regi-
broader customer base and increased access to potential markets. stration with the Food and Drug Administration of Thailand (FDA)
of the Ministry of Public Health. Medical devices are regulated by
Through its WTO membership, Thailand allows foreign investors to the Medical Device Control Division of the Thai FDA. To import
establish foreign-owned hospitals with no restrictions placed on medical devices into Thailand, an importer must have an import
foreign qualified doctors to practice. Major private hospitals, such authorization and registration permit from the Thai FDA prior to
as the Bangkok Hospital and the BNH Medical Center, do have shipment. Thailand prohibits the import of used/refurbished medi-
minority shares owned by foreign shareholders though. Listed at cal equipment. In addition, devices that cannot be marketed or
the Thai Stock Market - and thus open for shareholders of any nati- sold in the country-of-origin will not receive permission to be
onality - are the Bumrungrad Hospital, Bangkok Dusit Medical registered in or imported into Thailand.
Services, Smitvej Hospitals, the Bangkok Chain Hospital and the
Thonburi Hospital.

Medical devices
The Thai medical device market is one of the biggest in Asia. Its
market size was estimated at USD 1.14 billion (or USD 17 per capita)
in 2014 and is expected to grow 10 percent annually.

The best opportunities for medical devices and equipment in

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To sell a medical device on the Thai market, it must be registered
under the FDA’s risk classification system. The requirements for
admission under one of the three categories are different, but do
all include a CFS (Certificate of Free Sale) and GMP (Good
Manufacturing Practice) certificate. The Thai FDA accepts devices
that meet the following jurisdictions’ requirements, as demonstra-
ted by a certificate of free sale: the United States (USFDA), European
Union (CE mark), Japan (Pharmaceutical Affairs Bureau), Australia
(Therapeutic Good Administration) and People’s Republic of China
(State Drug Administration).

Foreign medical device companies wishing to sell their products in Pharmaceuticals


Thailand, must first register them according to a risk-based classi-
fication system. Medical devices will require either licensing or Another key driver of the Thai medical industry is the pharmaceuti-
registration. The Thai FDA groups medical devices into 3 classes’ cal market. This market was valued at USD 4.5 billion in 2014, which
sub-categories as follows: makes it the largest in Southeast Asia. The Thai pharmaceutical
• Class I “licensed” devices: only seven medical devices are market is forecasted to grow to USD 6.2 billion by 2019 according to
included in this category: condoms, examination gloves, Business Monitor International (BMI), with a compound annual
surgical gloves, sterile hypodermic disposable syringes, sterile growth rate of 6.6 percent. Thailand’s per capita pharmaceutical
insulin disposable syringes, HIV test kits for diagnostic use and sales are correspondingly projected to grow, from USD 66 in 2014
contact lenses. to USD 122 by 2024. This increase mainly comes from the rising
• Class II “notification” devices: rehabilitation devices, blood burden of both communicable and non-communicable diseases in
alcohol level measuring kits, silicone implants, and test kits the country. In addition, financial barriers to medical services
other that for diagnostic purposes. remain alleviated under the country’s universal healthcare system,
• Class III “general” devices: the lowest-risk devices category, which will serve to further benefit pharmaceutical sales.
covering 90 percent of all applications.
The FDA is responsible for regulating health supplement products. Prescription medicines make up for 80 percent of the pharmaceu-
The classification of these products depends on the types of ingre- tical market in Thailand and will continue to dominate the market.
dients used, daily dosages and claims. A health supplement is clas- In coming years, prescription drug sales will continue to be boosted
sified as a ‘food supplement’ if it contains common herbal ingre- due to improving healthcare conditions and the country’s universal
dients and other bioactive ingredients at a daily dosage level coverage.
recognized by the FDA as safe for food. Health supplements contai-
ning ingredients not approved as food ingredients and/or contai- Antibiotics will remain to be among the leading areas, although
ning vitamins and minerals that exceed the Thai RDI value, must be there is a growing trend of restricting sales of these treatments due
registered as traditional medicines, drugs or any other related to rising resistance to such drugs. Cardiovascular drugs will become
sub-categories. more important, due to the ageing population and the rising preva-
lence of unhealthy lifestyles. However, the shift from communica-
Products classified as traditional medicines and drugs must be eva- ble to non-communicable diseases in Thailand will not be as appa-
luated and approved by the Thai FDA’s product evaluation commit- rent as in other countries, due to the high incidence of HIV/AIDS.
tee prior to marketing. Registration dossiers are required, which
include information such as quality control reports, manufacturing Lastly, the use of herbal medicines is on the rise. The use of traditio-
processes, safety evidence and efficacy data. Products classified as nal medicines is being promoted by the government and there is an
food supplements require a notification process. increasing trend towards the use of them in hospitals and health
stations across the country.

Patented Drugs Market vs. Generic Drugs


Amongst prescription drugs generics are the mainstay, accounting
for over 62 percent of prescription sales in 2014. Although the mar-
ket is forecasted to grow in absolute terms, it is expected to relati-
vely decrease to around 60 percent of all prescription drugs due to
expected improvements for patented medicines. The govern-
ment’s healthcare schemes have improved access to medical treat-
ment, but the patient purchasing power is low. The generic drugs

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com (regional occupational safety and health exhibition).
• Medical Fair Asia/Medical Manufacturing Asia, Singapore, 31
August – 02 September 2016, www.medmanufacturing-asia.com
(biennial regional hospital, medical and pharmaceutical
exhibition).

Malaysia
• Southeast Asian Healthcare & Pharma Show (SEAcare), Kuala
Lumpur, 11-13 April 2016, www.abcex.com (annual exhibition on
medical devices & equipment, pharma & medical beauty).

market is also boosted by the government efforts to provide Besides these trade fairs, interesting conferences are organized in
immediate access to treatments for people suffering from HIV/ Thailand and the region throughout the year. For more information
AIDS. Finally, pricing and regulatory pressures on the patented sec- about these events, please contact us.
tor, will further boost generic drugs usage, as some multinationals
decide against launches of innovative drugs on the Thai market.
Dutch presence in Thailand
Over-the-Counter Medicines The Netherlands is one of the largest EU investors and EU trading
partners in Thailand. Around 200 Dutch companies have a presen-
Besides prescription medicines, over-the-counter (OTC) medicines ce in Thailand in a variety of sectors, including in the life sciences &
make up for 19.6 percent of total sale (BMI). The OTC market is health sector. Other Dutch companies do business in Thailand from
forecasted to grow, although its market share is expected to main- the Netherlands, including through local agents or distributors.
tain relatively constant. Key drivers are the rising tendency in
Thailand to self-treatment, the low costs of OTC medicines in gene-
ral and the high degree of liberalization of distribution. In the long- We support your business
term, OTC’s have the potential to benefit from a proposed liberali-
zation of distribution regulations, which would allow grocery and The Netherlands Embassy in Bangkok offers active support to
discount stores to sell medicines for self-medication purposes. Dutch companies already present in Thailand, Laos and Cambodia
and Dutch companies interested in doing business in these
countries. In addition, the Netherlands government has developed
Distribution several business support instruments, including financing for
demonstration projects, feasibility studies and knowledge
There are several rules a foreign player has to abide when distribu- acquisition. For more information, please visit www.rvo.nl/Thailand.
ting pharmaceutical products on the Thai market. Firstly, a phar-
maceutical company and/or its distributor must apply for an import
license or a manufacturing license. After the manufacturing license Relevant contacts
or import license is obtained, modern and traditional medicine/
pharmaceutical products are required to be registered with the • Netherlands honorary consulate in Phuket:
Food and Drug Administration (FDA) in order to be distributed in http://thailand.nlembassy.org, (e-mail: dutchhcp@gmail.com)
Thailand. As for the prescription and OTC medicines, these should • Taskforce Health Care: www.tfhc.nl
be distributed by an FDA authorized holder or distributer. • The Board of Investment of Thailand (BoI): www.boi.go.th
• The Netherland-Thai Chamber of Commerce (NTCC):
www.ntccthailand.org
Trade fairs • MKB Thailand: http://mkbthailand.com

Thailand
• Pharmex Asia, Bangkok, 10 – 12 November 2016, http://pharmexa-
sia.com (annual hospital, medical and pharmaceutical Published by:
exhibition). Netherlands Embassy in Bangkok
Website: http://thailand.nlembassy.org, E-mail: ban-ea@minbuza.nl
Singapore Follow us on Facebook (Netherlands Embassy in Bangkok),
• IDEM Singapore, Singapore, 8-10 April 2016, www.idem-singapore. LinkedIn (ASEAN-Neth: Dutch Business in Southeast Asia) and
com (dental exhibition and meeting). Twitter (@NLinThailand).
• OS+H Asia, Singapore, 24-26 August 2016, www.osha-singapore.

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